Nashville, TN. (Top40 Charts/ Capitol Records) -
Legends Hall Of Fame producer Robert Metzgar welcomes news that major domestic U. S.
Banks are financing new country artist production with investment capital at Indie labels. Investors and major domestic banks have taken on the role major labels have filled in the past. Edgar Bronfman, Jr. CEO of Warner Brothers says banks are now funding artist production accommodating new "indie" success rate with top producers in the business like Metzgar staying busier than ever. See www.robertmetzgar.com.
MSNBC television in a recent special one hour program entitled "FACING THE MUSIC" interviewed Edgar Bronfman, Jr. the CEO of Warner Music Group and Warner Music International. Bronfman and investors paid $2.6 billion for Warner in 2003 and took the company public in 2005. During that time Bronfman fired over a thousand Warner employees and downsized the company, bringing it back from the brink of collapse to profitability. Bronfman's family (Seagram's) at one time owned MCA Universal and sold it to French based utility Vivendi. Vivendi has since partnered with General Electric to form the new NBC Universal.
Aired on MSNBC in prime time, the television special which was produced by Business Nation dealt with some of the most sensitive areas of the music industry in 2007. CD sales at the majors are in a free fall in 2007 where digital downloads have almost replaced the CD as we know it. A much stronger demand for digital downloads accounts for 14% of Warner's income and growth. According to Bronfman, the majors must reinvent themselves in the face of so much indie success worldwide. Production of country music in Nashville has soared with producers like Hall of Famer Robert Metzgar exceeding the production schedules of 2006 in the first six months of 2007. See www.aimhighmusic.com
While the average new artist needs in excess of $150,000 to just get started at a label in Music City, (unless they partner with their producer or management company) major domestic U. S. Banks such as Citibank, Chase, Bank Of America, SunTrust, Washington Mutual and U.S. Bank appear to be taking over a role the majors filled with artists for a number of years. In the past, all a major label did was act as a bank for the artist, loaning them huge sums of money on the front end to get their career off the ground but taking the lion's share of the profits in order to pay those loans back. Most artists only saw income from their personal appearances and with years of interest and accounting, never saw any money from their major label partner.
Metzgar was recently quoted in the Wall Street Journal advising Chase Bank officials. "Today's new artist is smarter and just gets his production money from a bank, investors, or family and they finance their own recordings. All new artists want to own their own master recordings." Indie artists are having such huge success, many major country stars such as Travis Tritt, Trisha Yearwood, Garth Brooks, Dolly Parton, and others have jumped ship from the majors, gathered up their master recordings and made new deals with indie labels like Big Machine, Category Five, Curb Records, Platinum Plus, Broken Bow, Wal-Mart Records, Springhill and Rounder to get the distribution and exposure they need. Many of these labels employ the original business plan of Lew Wasserman at MCA which has become the NBC-Universal owned by General Electric today. Wasserman's MCA success was financed by Jules Stein and was recently featured in a Showtime television special entitled, "The Last Mogul." The new moguls are owners of independent labels with distribution. Metzgar told the Wall Street Journal, "Our business & production plan is based on the MCA Universal plans distributed by Lew Wasserman and Edgar Bronfman Jr. when the Bronfman's were still a part of Universal." See www.platinumplusuniversal.com
Big Machine records has led the new labels into "indie" success like no other label in the past two years. Scott Borchetta, former promotions director for Universal Nashville has taken his roster of new artists at Big Machine to the very zenith of success. Jack Ingram and Taylor Swift's career have all but overshadowed most of today's superstars at the majors. And, it is rumored that in addition to Trisha Yearwood, other major label stars are lining up to get out of their major label contracts and find alternative contracts for their careers. All because according to Bronfman, they simply make more money under their independent label arrangements. ( i.e. Bare Naked Ladies super group leaving the majors for good now get $6.00 per sale as opposed to $.60 a sale ) Some artists make ten times at the indies what they made at the majors.
According to Business Week Magazine, the major labels have lost control of their artists because new artists can now seek financing from investor groups, domestic banks, and wealthy entrepreneurs who finance their success and sell just as many records as the majors. The new indie labels have the same distribution, the same retail outlets, the same recording opportunities with producers that used to belong exclusively to the majors. Most importantly, today's artist demands the ownership of their master recordings. And U. S. Banks are willing to finance those recordings as long as the new artist has a label with distribution and leadership of top production people. Producers who produce top product are busier than ever in the studio with the entertainment business contributing 3 trillion dollars to the United States economy in music and movies. See www.capitolmanagement.com
In the past if a new artist wanted a million dollars in financing, they had to talk to the majors. Today they just talk to their banker. All major domestic U. S. Banks now have music divisions in Nashville, New York and Hollywood that finance the careers of new artists based upon their contracts with indie labels that have distribution and great production teams. Banks in the music capitols now loan money on intellectual property in the same way they finance real estate. Promotion takes place almost exclusively on myspace.com, youtube.com and itunes. New artists really don't need the majors to launch their careers anymore.
Music producers support the state of Tennessee with huge tax revenue sums
Music producers in the city of Nashville bring the State of Tennessee over $3.6 billion in revenue, producing ten thousand major label sessions ($1 million dollars an album) over 500,000 master sessions ($150,000 for a 12 song master album) in studios, and over a million demo & limited pressing sessions ($37,500 for a demo album of 10 songs). This study which was done by the Belmont University School Of Business, shows the amount of tax revenue brought into the State by production and management firms far exceeds even that huge figure if you take into account, motels, meals, and the spending power of the millions of people who come to Music City to record, shop and attend the CMA Festival, Bonnaroo, and the many recording sessions in Nashville's studios.
"Production teams now partner with major banks in Tennessee to drive tax revenue for the State Of Tennessee. Those taxes pay for State law enforcement, State legal expenses, more first responders, budget shortfalls and charitable services that various music stars support throughout the State Of Tennessee." The salaries of thousands of State of Tennessee employees and employers are supported by the music industry with "producers and production companies the leaders in bringing that income through the State's tax coffers." Some of the production leaders in supporting the State of Tennessee, the Country Music Hall Of Fame, and the Grand Ole Opry are producers at Capitol Management Group and other production and entertainment groups. They belong to a select group of producers who stay busy year round in the studio. Production of country music, Christian music and bluegrass is an all consuming task for producers who are putting songs into the Billboard charts every year for many years in a row. To contact producers at these companies, call toll free 800-767-4984.
Conclusions are that new music will continue to be produced and financed by an ever increasing group of major banks, indie labels, and new artists who seek to enter the all important music business which is the second largest income producer for the State Of Tennessee.
